Cost Planning and Pre-contract Cost Control

8/17/2019 Cost Planning and Pre-contract Cost Control

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Cost planning and pre-contract cost control Paper 1114 Page 3

Part A: The need for cost control

Contents

1. Introduction

2. Controlling the design 2.1 Cost planning

3. Cost control activities 3.1 Outline proposals3.2 Design stage

Self-Assessment Question 1


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1 Introduction

It is vital to keep the total cost of a development within a client’s budget and, for this,efficient control of the design process is a prerequisite.

The need is now possibly greater because:

profit margins have become smaller and therefore variations in cost or time canseriously affect project viability;

clients are becoming both larger and more aware and therefore expect morefrom their advisers;

projects have become more complex, needing greater control;

quality is expected in design and materials.

The control mechanism should comprise a cyclical system of initial planning which isthen monitored and reported on. Any adjustments required are made, and the revisedplan continues to be monitored, adjusted and so on. Without the review and

adjustment, there is no control.

For a cost control process to be effective, the quantity surveyor should be involved asearly in the process as possible. The earlier he makes his contribution, the moreeffective he can be.

The cost plan needs to be realistic. It should be established early on in the designprocess. As the design evolves, each drawing is cost checked and any differences

reported to the client and architect. Changes to the design may mean that changes arerequired to the cost plan to bring the project back within budget, or the budget mayneed to be increased.

For a cost control process to be effective, the quantity surveyor must ensure that allparties are aware of design implications early on and action taken collectively so asnot to compromise the client’s objectives.

There must be more flexibility in the early stages of design than in the later stages:fewer firm decisions have been made, and there is more chance of affecting the cost.Once firm decisions have been made on shape, form etc, fewer sections are left to bedecided and significant variation in costing is less likely.


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2 Controlling the design

Once a proper control system is adopted, the surveyor should be able to advise theclient on how much to spend, how to allocate his money to the different parts of thebuilding to get a balanced design solution within the financial restraints, andeventually to confirm that the money is being spent as planned.

An effective control method may be necessary for a number of reasons:

The client may have limited funds.

In a public sector project, a cost limit may be laid down.

In a commercial development, the client may be governed by the possibleincome generated by the project.

One of the problems of designing a building is maintaining control over costs whiledesign decisions are being made. To aid this, cost planning was developed.

2.1 Cost planning

The full cost planning process is designed to achieve a balanced expenditure andcontrol the design development so that the client’s financial commitments are met.

The process can be divided into three main parts:

To set a realistic cost limit (see Parts B and C).

To decide how this money is to be spent (see Part D).

To check that the money is being spent as intended (see Part D).

The process should achieve a good, balanced design solution, cover all the client’srequirements and be carried out throughout the whole design period.

3 Cost control activities

The traditional design procedure for a building, from the time an architect isappointed to the completion of the project, may be broken down into several stages.These stages will vary, both in the length of time and in the operations necessary,depending on the circumstances of the project.

The architect and client are the only members of the design team who are interestedin the success of the building as a whole rather than any particular aspect. All othermembers of the team have their own bias, the quantity surveyor being primarilyinterested in cost. The design stages indicated in Figure 1 are based on thosesuggested by the RIBA Plan of Work, but other stages are possible if a different formof design method is used.

3.1 Outline proposals

The quantity surveyor should be ready to provide analyses of similar projects

(see Part B) and discuss these and other cost problems with the design team.

The architect experiments with various planning solutions, taking into accountthe client’s requirements, circulation, specialist works and the general costinformation.


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The architect prepares an outline scheme based on the main dimensions.

The quantity surveyor makes a further check to see whether it is likely to bewithin the cost limits set by the client, or, where no limit is set, gives apreliminary estimate of the cost. (The preparation of estimates is dealt withseparately in Part C.)

3.2 Design stage

This is in two subdivisions: scheme or sketch design, and detail design.

1 Scheme or sketch design

The architect completes his study of user requirements for the building, preparesscheme designs and passes them to the quantity surveyor. It is unlikely that only onescheme will be drawn out – the architect may draw fittings layouts to ensure that therooms are of a suitable size. The specialist engineers should provide essential details(eg boiler room sizes). The architect will probably have decided generally on the typeof frame, walling, roofing etc.

The quantity surveyor’s work at this stage will depend on the procedure agreed withthe architect. If cost planning has been decided upon, it may be in elemental form,comparative form, or, as is often the case, a mixture of the two. This is discussed indepth in Part D.

Elemental cost planning. The quantity surveyor prepares an outline plan fromprevious analyses at the beginning of the scheme design stage and submits it tothe architect for discussion. After the plan has been checked against thescheme design drawings, it is put into its final form.

Comparative cost planning. Before the architect settles on the scheme design,

the quantity surveyor makes cost studies of various alternatives that thearchitect suggests he might use. The architect then makes a choice andcompletes his scheme designs. On receipt of the scheme designs, the quantitysurveyor prepares an elemental cost plan based on his earlier cost studies.

At the end of the scheme design period, the architect prepares his presentationdrawings for the client.

2 Detail design

The architect checks the specialist drawings to see that they fit in with the generalscheme, and prepares his own detail drawings.

Where elemental cost planning is used, the detail design period is a busy time for thequantity surveyor. As each detail drawing is prepared by the architect, he should sendit straight to the quantity surveyor, who will make a cost check to see that the value ofthe elements in the cost plan are not being greatly exceeded (or reduced). If there is adiscrepancy, the quantity surveyor should inform the architect and suggest alternativesolutions that will allow the cost plan to be adhered to. The architect may accept oneof the alternative solutions, provide one of his own, or, with the agreement of theclient, alter the target figure.

When all the design drawings have been prepared and cost checked, the quantity

surveyor should make a final cost review and submit a report to the architect andclient.


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The relationship between the plan of work and the cost planning process is shown inFigure 1.

The process of value management is also a pre-contract cost control procedure, butspace in this paper is limited and a separate paper is included if your module requiresyou to have a knowledge of the procedure.

SELF-ASSESSMENT QUESTION 1What is the purpose of pre-contract cost control?

Answers to SAQs are to be found at the end of the paper.

FIGURE 1 Cost procedure chart

Procedure EstablishCost limit

CoststudiesFeasibilityreport

Coststudies

Preparecost planbased onfinalsketchdesign

Preparecost checks

Preparecostanalysis

BidEvaluation

Costreporting/cash flowforecasts

Preparefinalaccount

Bringrecordsup todate

Designstages

Inception Feasibility Outlineproposals

Sketchdesign

Detaildesign

Workingdrawings

Bill ofquantities

Tenderstage

Projectplanning

Operationson site

Completion Feedback

Techniquesused

Preliminaryestimate:unit, cube,superficial

Elementalestimating

Approximatequantities

Elementalcostanalysisof tender

Monthlytracking ofvariationsandinstructions


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Part B: Cost Information

Contents

1. Introduction

2. Cost analysis 2.1 Purpose of a cost analysis2.2 Preparation of a cost analysis2.3 Wall to floor ratio2.4 Quality factor2.5 Preliminaries and contingencies

3. Items included in elements

4. Comparison of analyses

5. Other sources of cost data 5.1 Reliability of cost information5.2 Information library

6. Indices

Self-Assessment Question 2


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1 Introduction

The basis of any cost control system is a suitable library of cost information,including cost analyses and other sources of cost information, all suitably classified toallow easy access.

When preparing a cost plan it is important to understand how the cost information it

is based on has been collected and why you might want to adjust the information.

2 Cost analysis

A cost analysis is a systematic breakdown of cost data to facilitate examination.

The method used for building works is generally to:

Analyse the cost of the project in terms of functional elements (eg foundations,

external walls, roof etc) by reference to the priced bill of quantities. Many billsof quantities are originally prepared in trade order and the costs need to bebroken down and reassembled into an elemental order.

Break down the total cost of each element and express it as a cost per squaremetre of gross internal floor area. The gross floor area is the total area withinthe internal structural face of the enclosing walls.

Where a bill of quantities is not available, the contract sum analysis may be furtheranalysed to provide basic cost data. It may not be possible to make a full analysisfollowing the Building Cost Information Service (BCIS) guidelines (given later inthis paper).

The gross floor area is used as a yardstick because:

it represents something useful to the client – a near approximation to theamount of accommodation provided in the building;

it provides a convenient comparative measure between similar projects;

it is relatively easy to measure on all jobs irrespective of their size, shape orconstruction.

The total cost of each element divided by the floor area is called the ‘ elemental cost

per square metre’.

The quantity of each element (eg the surface area of windows) in square metres is

also usually given in the analysis where practical and this is called the ‘quantity

factor’ for the element (sometimes also known as the elemental unit quantity orEUQ).

The total cost of the element divided by the quantity factor is called the ‘elemental

unit cost’. Take care not to confuse this with the elemental cost per square metre.

In addition to the purely mathematical data, other information that might affect costsshould be recorded in the analysis. Examples include:

Qualitative issues – expressed in a brief description of materials used, designconsiderations, soil conditions etc. In detailed analyses, where there are severaltypes of construction within an element, the quantity of each main type shouldbe indicated.


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Contextual issues – date of tender, type of contract, parties to the contract,contract period, brief description of the work, and any particular marketconsiderations, such as shortage of labour in the area.

Accommodation details – gross floor area, usable area, circulation area,ancillary area (area of toilets, lifts, plant rooms etc), and the area taken up byinternal walls and partitions.

A set of plans and elevations, together with suitable photographs, would help in usingthe analyses.

In general, items should be included in the same element every time, but because ofthe large variations in building types and construction this is not always possible.Where items are included in elements which are different from the normal, state thisfact in a note against both the element in which they are included, and the element inwhich they are normally included. For example, windows in curtain walling areincluded in the ‘external walls’ element, so this should be stated in this element and anote made against the ‘window and external door’ element that these are ‘included in

external walls’.

In every cost analysis, list all the elements so that the element numbers remain thesame for reference and comparison purposes. Where there is no cost attributable tothe element, write ‘nil’ against the element in the cost column.

Unusual or difficult items (eg canopies) should be included with the most appropriateitem. Where they are of significant cost importance, give details.

Detached or mainly detached chimney stacks should be included in ‘heat source’element. Stacks attached to the structure should be included with the most appropriateelement (eg external walls, internal walls or partitions).

The cost of tank rooms will normally be divided between the various elements(external walls, roof etc) and tank casings will be added into the ‘builder’s work inconnection’ element.

Decorations should be allocated to the appropriate element. Decoration on fair-facedwork should be included in the appropriate finishings.

Analyses are generally based on the tender figures. Cost data can be obtained quiteeasily from priced bills of quantities. The time lag between receipt of tenders andpreparation of an analysis should be short so that the information obtained is as up todate as possible.

Modification notes may be added to an in-house analysis when the final account hasbeen prepared. These may include details of large cost variations caused by re-measurement or adjustment of prime cost and provisional sums.

A concise cost analysis is used when cost planning at feasibility stage. As few designfeatures would be known at this stage, it is not necessary to break the costs down intodetailed elements. An example is included in the Appendix at the end of this paper.

As the design develops, it is important to choose a detailed cost analysis that closelyrelates to the proposed project, and as much information as possible is required so

that an informed decision on cost allocation can be made. This detailed cost analysisenables the quantity surveyor to make adjustments for factors which will affect thecost of the proposed elements more accurately.


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The following section gives detailed guidance on how to prepare an analysis. Youwill not be assessed on the preparation procedure. It is purely to demonstrate how thefigures are established. You will be assessed on sections 4 onwards.

2.1 Purpose of a cost analysis

The purpose of a cost analysis is to reveal the cost relationship between different

sections of a building and to allow one building to be compared with another. Theanalysis should bring out those features in different buildings that bear most heavilyon costs and may require special attention in design. It represents a series of facts butdoes not state whether one building is better or worse than another. Analyses arenormally used to help in the preparation of cost plans for future buildings, but mightalso be used to compare different design solutions.

In order to use cost analyses effectively it is necessary to understand how the projectcosts have been analysed. A standard approach to analysing bills of quantitites wasestablished by the Building Cost Information Service (BCIS) of the Royal Institutionof Chartered Surveyors. Their list of elements and allocation of costs has been widelyadopted so that a reasonable size data base can be established. By having a standard

approach to the analysis you can be confident in using the figures for the preparationof a cost plan.

2.2 Preparation of a cost analysis

Many cost analyses are produced by computer if the bills of quantities have beenproduced using a comprehensive bill package. If items are coded carefully wheninitially measured, it is a simple process to enter the bill rates from the successfultenderer and then re-sort the bill into elemental order. All the financial informationfor a cost analysis is then printed out.

The following items are generally required for the manual preparation of an analysis:

1. The priced bill of quantities submitted by the accepted tenderer with any errorscorrected.

2. A priced list of any adjustments agreed before the contract is signed.

3. Details where possible of the build-up of provisional and PC sums.

4. Copies of the plans and elevations.

5. The dimension sheets.

6. If the details of the contract are not included in the bills of quantities, thecontract documents may also be required.

When preparing the analysis:

Each element heading is placed at the top of a column. Generally abstractpaper is suitable for this. By systematically going through the bill and anyreduction bill, items may be allocated to one or other element. Where groupsof items are all in the same element (eg excavation and earthworks), only thetotal cost needs to be entered on the analysis sheet.

Transfer the figures obtained to a separate sheet – see Figure 2 for a typicallayout. The total floor area of the building is obtained from the drawing (orfrom the description in the bill of quantities). The total cost and the totals of

each element are divided by the floor area in square metres. The elementalcosts so obtained are also entered on the sheet. The element unit quantities aretotalled and written on the summary sheet. The element unit rate can then becalculated.


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In some cases an additional column is included between columns B and C showingthe percentage of the total cost that each element represents.

The amplified cost analysis itself is set out on sheets similar to those shown in Figure3.

The analysis should be accompanied by any other details that have not been statedelsewhere, including a copy of the contract drawings and any informativephotographs of the completed building.

Each element in the amplified analysis should have a brief specification covering thedesign criteria. This information may be obtained from the bills of quantities, thoughin some cases reference to the drawings may also be necessary (eg details of theframe). In some cases the cost of the element should be broken down into sub-elements.

FIGURE 2 Summary of amplified analysis

Gross internalFloor area ...........................

Date of tender...............×..............

Element Total cost ofelement

£

Cost ofelement per

m² of gross floor area

£

Element unitquantity

Element unitrate

£

Number andname ofelementincluded inthis column

Total cost ofeach elementand also thecost of thegroup elements

Cost per m² ofeach elementand for thegroupelements

Quantityfactors includedhere whereappropriate

Column Afiguredivided byColumn Cfigure

A B C D

FIGURE 3 Amplified cost analysis

Element anddesigncriteria

Totalcost ofelement

£

Cost ofelement

per m² ofgross floorarea

£

Elementunit

quantity

Elementunit rate

£

SPECIFICATION

Items as included in the Summary

Number andname ofelement;

other ratios

alsowall

andfloor

Main specificationinformationincluding areas,numbers, costs etcof some of the all-inunit rates

ietotal cost of item

area


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Each analysis should have a front sheet containing the following details:

1. Reference numbers.

2. Description of type of building (eg hospital).

3. Name of client and architect. (Engineers and contractor are also sometimesincluded, and quantity surveyor if the analysis is for other than personal officeuse.)

4. Name and address of project.

5. General description of the works. This should be similar to that included in thebill of quantities and should include number of storeys, and details of items ofconstruction likely to have a major effect on cost. The main items included inthe external works should be stated.

State also whether any normal items are omitted (eg foundations included in aseparate contract) and whether the access, topography or geology of the site isabnormal.

6. Total gross floor area, measured to the internal surfaces of external walls, andover internal partitions, internal structural walls and stair wells. Area of open-sided verandahs etc should be given separately and not be used for calculatingcost per square metre of floor area. However, verandahs incorporating screenwalls, proper floor finishes etc, providing almost normal accommodation,should be included in the measurement of floor area.

7. Details of area etc. Give a breakdown of the gross area into basement, groundand other floors, with approximate lengths and widths where appropriate. Alsogive storey height and/or the heights of various parts of the building. The totalarea should be broken down into usable, circulation, ancillary and internaldivision areas. The ratio of usable space to other sundry spaces gives anindication of planning efficiency.

As a further guide to planning efficiency of two similar-sized buildings, the‘wall to floor ratio’ (described below) may be included. The internal cubiccapacity may also be given. This is the gross internal floor area of each floormultiplied by its storey height. Note that the method of calculating the cube forthis purpose is different from that used for estimating purposes.

8. Approximate percentage of the building that is single-storey, two-storey, three-storey etc. Plant, tank and similar rooms above the main roof should beignored for this purpose. The different storey heights should be statedseparately with details of where each occurs. The storey height of single-storeybuildings and of top floors of multi-storey buildings is measured from floorfinish to underside of ceiling finish; in other cases it is floor finish to floorfinish.

9. Type of contract and contract period; whether open or negotiated tender; andwhether firm price or fluctuating. Details may be given here of the number oftenderers, the spread of tenderers and approximately how far below the nexttender the accepted one was. This information is useful for spotting freaktenders.


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10. Total tender price.

11. Date of tender.

12. Market conditions in the area at the time of tendering.

13. Number of functional units: eg net usable floor area for offices and factories;units of accommodation for schools (places), hostels (beds), dwellings(persons) etc. The total cost of the project less external works should bedivided by the number of functional units and stated as the functional unit cost.

2.3 Wall to floor ratio

The wall to floor ratio is obtained by dividing the external wall area measured overwindows and doors by the total floor area. This gives a ratio that is useful for a quickcomparison of buildings, particularly in the early stages of a job when alternativeplanning solutions to obtain the same floor area are being considered. However, whilethe wall/floor ratio does give a reasonable indication of the efficiency of a building’s

shape for a given floor area, it is not a measure of planning efficiency betweenbuildings of substantially different floor areas, because the bigger any given shape,the lower the perimeter/area ratio becomes.

2.4 Quality factor

The quality factor can be included in the analysis in the form of specification notes,with details of the relevant areas and unit costs for the main items within an element.

2.5 Preliminaries and contingencies

Opinion differs as to whether preliminaries should be kept separate in the analysis orwhether they should be spread on a proportionate value basis throughout the otherelements.

Preliminaries may cover more than varying overheads (foreman, use of plant etc).They may reflect access and storage conditions, phasing, difficult labour areas, and insome cases may include profit and general overheads (eg builders’ establishmentcosts). Because firms’ methods differ, it may be an advantage to spread thepreliminaries throughout the elements for comparison purposes. On the other hand,by keeping them separate the architect will have a better indication of how much hasbeen allocated to any section of the work.

In the elemental summary, separate sets of figures may be calculated to include thepreliminaries separately, with a separate set of columns to show the preliminariesapportioned among the elements. In the breakdown of an amplified analysis, thepreliminaries should be shown as a percentage of the remainder of the contract sum.

The value of preliminaries and some other items will depend upon the tenderingprocedure to be used and the type of contract.

Competitive tendering using open competition generally results in the lowestpossible tender figure being obtained. However, the standard of work achieved usingthis method may be lower than with selective tendering, resulting in delays, expense

due to loss of production in the case of factories, or increased user costs resultingfrom bad workmanship.


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Selective tendering should produce the desired standard of workmanship, as thearchitect will consider this when making his choice of firms. Because of the limitedcompetition, the tender figure may be slightly higher than with open tendering, butthis may reflect the cost of improved supervision and craftsmanship.

Negotiated tendering may be used to gain the advantages from appointing thecontractor at an early stage in the project. The contractor can help the architect in

design, and obtain economies by allowing for the use of available plant and usingmethods of construction familiar to the firm and work people. Unfortunately, becauseof lack of competition, most negotiated contracts seem to work out more expensivethan similar contracts using competitive tendering.

Negotiated contracts are sometimes used for development on the same site as aproject already in progress, or on an adjacent site. They may result in savings, as thecontractor’s site organisation for the first contract may be used for the new one.

If cost planning procedures are carried out, some form of lump sum contract islikely to be used, though schedule contracts and cost reimbursement contracts may beused in exceptional cases. The form of contract used may affect the cost. The type

that places most responsibility on to the contractor is likely to be the most expensive.

If the contract does not contain a fluctuations clause (ie a firm price contract) thenthe estimator must make his own estimate of future market conditions and allow forany increases in his tender price. The difference in tender figure between a contractwith a fluctuations clause and one without may be considerable, depending upon thelength of the contract and the estimator’s anticipation of market trends. When costplanning, the quantity surveyor should note carefully whether a firm price or afluctuation type contract has been allowed for.

The time allowed for a project may also affect the tender figure. Some overheadcosts (eg erecting huts) may remain constant no matter how long the contract.However:

If a large amount of overtime is necessary to complete the project on time, thiswill result in a higher tender figure.

The total cost of items such as foreman will increase with the length ofcontract.

With a short contract period, there may be difficulty in obtaining completeddrawings when required, unless the project has been very well planned.

Short contracts carried out in the winter months may involve extra costs due tothe weather conditions.

3 Items included in elements

Table 1 indicates some of the information that should be included in an amplifiedanalysis if prepared in accordance with the BCIS rules.


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TABLE 1 Information to be included in an amplified analysis

Element anddesign criteria

General notes and examples Element

unitquantity

Main items included in element

1 Substructure Permissible soil

loading, nature ofthe soil, depth ofbearing strata, thesite levels and thedepth of watertable should begiven. Thefoundation areas ofsections of thebuilding which areof different heightsshould be statedseparately in thebreakdown. Totalload and average

load on pilesshould be stated.

Includes items up to the undersideof the lowest floor screed. It

includes basement floors but NOTbasement walls (see externalwalls). Stanchions and columnstogether with their casings areincluded with frame element andnot in substructure. The cost ofpiling and driving is shownseparately in the breakdownstating the type of system, thenumber of piles and their averagelength. Examples of how the typeof information is given is shownbelow.

Area oflowest

floorlevel(s)in m²

Excavations and disposalPlanking and strutting

Concrete in foundations, groundbeams, and column basesHardcoreFloor slabBrickworkMembraneDPCDuct coversArea retaining walls, pavings andstepsSleeper wallsJoist and boarding to suspendedground floorsSteps or ramps in floor slabPiling

Permissiblesoil loading 40.00 kN/m²

Nature ofsoil

Soft clay withpatches of sulphatebearing soil

Depth ofbearingstrata

Indeterminate(foundationsdesigned on partialfriction and partialbearing basis)

Depth ofwater table

No water tableapparent

Site levels Gradient 1 in 20

2.1 Frame A note should begiven of the gridpattern and columncentres in bothdirections

The total floor areain each height offrame, togetherwith design loadsand storey heights,should preferably

be statedseparately in thebreakdown

The cost of the frame where thebuilding is used for differentfunctions and/or where differentnumber of storeys should bepreferably given separately in thebreakdown.

Totalfloor areacontainedin eachheightand typeof framem²

Steel or concrete frame includingmain floor and roof beamsTrusses of framed buildingsMortices for holding-down boltsHolding down bolts and groutingConcrete casing to steelFormworkTrimming for staircasesPiers should be included with‘External walls’ or ‘Internal wallsand partitions’Beams supporting roofs or floorsof unframed buildings should be

included with ‘Upper floors’ or‘Roof structure’Filler joists should also beincluded with ‘Upper floors’ or‘Roof structure’

Numberof storeysColumnspacingDesign

loadsRoofFloorsTotal floorareaStoreyheights

Single3.000 m× 17.00 m

720.00N/m²

7500 m²

4.000 m(Floorlevelto eaves)7.050 m(Floorlevelto ridge)

Two3.000 m× 7.000 m

720.00N/m²3.00 kN/m² 650 m²

3.000 m(Groundfloor)First floor2.800 m(Floor toceiling)


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unitquantity


2.2 Upper floors Design load andspans should bestated.

The area and cost of suspendedfloors in and over basements areincluded in this element. Net areaonly should be measured and stair-wells etc deducted. The cost of

access and private balconiesshould be given separately in thebreakdown. The cost of suspendedfloors in or over basements shouldbe given separately in thebreakdown

Totalfloorarea ofupperfloors

m²

Beams to floors other than those in‘Frame’PadstonesConcrete or hollow tile floorsreinforcement to floors

Formwork to floorsPlates, joists and boardingaffording platform to upper floorsFiller joists to floorsStructural screeds to floorsBalconies

2.3 Roof Design loads andspans should bestated.The angle of pitchshould be statedfor sloping roofs

Area on plan is measured overallto the edge of the eaves and voidscaused by rooflights etc are NOTdeducted.Cost of plant rooms on roofsshould be broken down andallocated to the appropriateelements. The cost of rainwaterdownpipes is NOT included in this

element but should be added to‘Internal drainage’. This elementshould be broken down into foursub-elements

2.3.1 Roof structure2.3.2 Roof coverings2.3.3 Roof drainage2.3.4 Roof lights

Totalarea ofroof m²

2.3.1 Roof structure Wall plates and roof timbersRoof trusses other than those in‘Frame’Eaves construction and fasciaGable endsInternal walls above plate levelChimneys above plate levelexcluding isolated chimneys

Parapet walls and balustradesConcrete or hollow tile roofsReinforcement ro roofsFormwork to roofsFiller joists to roofsPadstonesBeams to roof other than those in‘Frame’

2.3.2 Roof coverings Underfelt and battensTiling, slating etcRoof screedsWaterproof roof coverings

Flashings and trimsRoof insulation material

2.3.3 Roof drainage GuttersRainwater heads and roof outlets

2.3.4 Roof lights DomelightsSkylightsLantern lightsFramework and kerbs to the aboveOpening gearGlazing


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unitquantity


2.4 Stair

The number andthe total verticalheight of each

staircase and itswidth betweenstringers should begiven

The cost of external escapestaircases should be givenseparately in the breakdown. If thestaircase structure is included withthe ‘Frame’ or ‘Upper Floors’ this

should be stated in this and theelements concerned.Cost of landings at floor levelsshould be included with ‘UpperFloors’. This element should bebroken down into three sub-elements:

2.4.1 Stair structure2.4.2 Stair finishes2.4.3 Stair balustrade andhandrails

2.4.1 Stair structure RampsLandingsStair constructionCat ladders

External staircases

2.4.2 Stair finishes Finish to treads and risersFinish to landingsFinish to rampsFinish to aprons and stringsFinish to soffits

2.4.3 Stair balustrade and

handrails BalustradesHandrails

2.5 External

walls

The approximate

‘U’ value shouldbe given inW/m² ºC

If calculated load-bearing brickworkgive indication ofstructural loading

External wall in m²

Gross floor area inm²

=_____________

Basement wall in

m²


=_____________

Includes basement walls but NOTinternal finishes, windows, doorsto shop fronts. Walls are measuredon external face and the height ismeasured from the underside ofground floor screed (or basementscreed in the case of a basementwall) to plate or eaves level (orunderside of ground floor screedfor basement wall).

Windows and door openingsshould be deducted from overallarea.

In the breakdown the costs, areas

and unit rates for basement wallsand for different types of wallsshould be given separately.

Structural walls forming animportant part of the loadbearingformwork should be givenseparately. If walls are self-finished internally this should bestated.

Totalarea ofexternalandbasementwalls m²

Brickwork excluding gables andparapet wallsFair face and facingsApplied external finishesPlinth and string coursesSheeting and sheeting railsCurtain walling and back up wallsto curtain wallingBasement wallsVertical tanking


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unitquantity


2.6 Windows and

external doors

The area ofopening lights towindows should bestated.

Windows in m²

Gross floor area in

m² =_____________

External doors in

m²


=_____________

The area should be measured thefull opening in the wall

In the breakdown the costs, areasand unit rates for different types of

windows (eg wood andaluminium) should be givenseparately

This element should be brokendown into two sub-elements.

2.6.1 Windows2.6.2 External doors

Totalarea ofwindowsandexternal

doors m²

2.6.1 Windows

Metal windowsWood windowsShop fronts

Frame and sills, cover fillet etcIronmongeryGlazing and panel infillingBacking up walls to windowsCrampsLintels and cavity dpcsSillsWork to reveals of openings

2.6.2 External doors

DoorsFanlights and sidelightsFrames and thresholds, linings,architraves etc

IronmongeryGlazing and panel infillingCramps and dowelsLintels and cavity dpcsThresholdsWork to reveals of opening

2.7 Internal walls

and partition

Internal walls andpartitioning in m²


=_____________

Openings should be deducted fromoverall area.

In the breakdown the costs, areasand unit rates for different types orthicknesses of internal walls andpartitions should be givenseparately.

Structural walls forming animportant part of the load-bearingframework should be givenseparately.

Items forming part of crosswallconstruction should be givenseparately.

The number of proprietary WCcubicles should be stated.

Doors etc in proprietary partitionsshould be included and the number

stated.

If proprietary partitions are selffinished this should be stated

Totalarea ofinternalwallsandpartitionsm²

Concrete walls together with thereinforcement and formworkBlockworkBrickworkFair face and facingsChimneys forming part of internalwalls (up to plate level)Patent partitions including doors

etc included in the partitionsScreensSliding and folding partitionsBorrowed lightsWC cubicles including doorsGlazing to above itemsInternal balustrades not formingpart of a staircase or landing.


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unitquantity


2.8 Internal

doors

The area should be measured thefull opening in the wall or partition Doors to WC partitions, doors inproprietary partitions and those

forming part of sliding or foldingpartitions are NOT included in thiselement and should be allowed forin ‘Internal walls and partitions’.

In the breakdown the costs, area,unit rate and number of each typeof door should be given separately.The number of single and doubledoors should preferably be statedseparately.

Totalarea ofinternaldoors m²

Doors other than those mentionedin column twoHatchesFanlights and sidelightsFrames and linings

Architraves and stopsIronmongeryGlazingCramps and dowelsLintelsThresholdsWork to reveals of openings

3.1 Wall finishes Include all preparatory work,backings and finishes to internalwall surfaces.

In the breakdown the costs, areasand unit rates for the main types offinish should be given separately.

The finishes to the inside ofexternal walls should be givenseparately. Fair face and facings tobrick, block and concrete walls areNOT included in this element andshould be allowed for in ‘Externalwalls’ or ‘Internal walls andpartitions’.

Totalarea ofwallfinish m²

PlasterBackings for tiling etcWall tiling, mosaicPanelling

Insulation forming a wall finishNon-structural column casingswhere not required for protectivepurposesBattening outPicture and dado rails

3.2 Floor finishes Includes all preparatory work,beds and finishes to floor surfaces.

In the breakdown the costs, areasand unit rates for the main types offinish should be given separately.

The finishes to staircases are NOTincluded in the element and shouldbe allowed for in ‘Stairs’ element.Structural screeds and boarding totimber framed floors are NOTincluded in this element andshould be allowed for in ‘Upperfloors’ or ‘Substructure’ asappropriate.

Totalarea of

floorfinish m²

FinishingsScreeds

Skirtings


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unitquantity


3.3 Ceiling

finishes

Includes all preparatory work andfinishes to surfaces of soffits.

In the breakdown the costs, areasand unit rates for the main types of

finish should be given separately.If a ceiling is used principally as asource of heat or artificial light orfor ventilation it should beincluded in the appropriateServices element and a note madehere and in the service element.

The finishes to soffits of staircasesare NOT included in this elementand should be allowed for in‘Stairs’ element. The finishes tosoffits immediately below the roofshould be given separately. Theelement should be broken down

into two sub-elements

3.3.1 Finishes to ceilings3.3.2 Suspended ceilings

Totalarea ofceilingfinish m²

3.3.1 Finishes to ceilings PlasterBeam casings, where non-structuralCornices

Roof light linings

3.3.2 Suspended ceilings Suspended ceilings and beams

4.1 Fittings and

furnishings

This element should be brokendown into four sub-elements

4.1.1 Fittings, fixtures andfurniture4.1.2 Soft furnishings4.1.3 Works of art4.1.4 Equipment

4.1.1 Fittings, fixtures and

furniture Storage and equipment shelvingCurtain tracksBlind boxes and pelmetsFoot-scrapersWindow-seatsServery countersKitchen hatchStorage racks

Draining-boardsBuilt-in cupboardsFixed cupboardsKitchen benches and tablesPin boardsSun blindsFurnitureIronmongery

4.1.2 Soft furnishings CurtainsLoose carpets

4.1.3 Works of art Pictures

Sculptures

4.1.4 Equipment Non-mechanical and non-electrical equipmentGymnasium equipment


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unitquantity


5.1 Sanitary

appliances

Number of personsof each sex served

should preferablybe stated in thecase of industrialand commercialbuildings. Whetherthe fittings aregrouped ordispersed shouldbe stated.

In the breakdown the costs,number and unit rates for eachtype and quality of fitting shouldbe given separately.

Builder’s work is NOT included inthis element but in a separateelement of that name (5.14)

Sanitary fittings (excluding trapsexcept where supplied withfittings)Towel rails (other than hot watertype)

Toilet roll holders.

5.2 Services

equipment

In the breakdown the costs,number and unit rates for eachtype and quality of fitting shouldbe given separately. Builder’swork is NOT included

Kitchen equipmentLaundry equipmentHospital and dental equipment

5.3 Disposalinstallation Number of sanitaryappliances servedand specialequipment shouldbe stated.

This element should be brokendown into two sub-elements:

5.3.1 Internal drainage5.3.2 Refuse disposal

Builder’s work is NOT included

5.3.1 Internal drainage Waste and soil pipes, trapsStack pipes as far as gully or jointto drain. Vent pipesOverflowsFloor channels and gratingsRainwater downpipes

5.3.2 Refuse disposal Refuse ductsChutesBinsLocal incinerators together withflues.


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unitquantity


5.4 Water

installation

The number ofcold- water, hot-

water, steam andcondensate draw-offs should each bestated separately.

This size ofcisterns, cylindersetc shouldpreferably bestated.

Cold water supply and headertanks for heating systems are NOTincluded in this element andshould be allowed for in ‘Heatsource’. Pipework and fittings for

steam distribution for spaceheating are NOT included in thiselement and should be allowed forin ‘Space heating and airtreatment’

This element should be brokendown into four sub-elements:

5.4.1 Mains supply5.4.2 Cold water service5.4.3 Hot water service5.4.4 Steam and condensate

5.4.1 Mains supply

Piling from entry into the buildingup to (but not including) thestorage cistern or draw-off taps,

valves and meters etc on the aboverun.Insulation to above

5.4.2 Cold water service

Storage cisternsCold water distribution pipeworkPumpsValves other than those formingpart of sanitary appliancesInsulation to these items

5.4.3 Hot water service

CylindersHot water and mixed waterdistribution pipeworkPumpsValves other than those formingpart of sanitary appliancesInstantaneous heatersInsulation to these items

5.4.4 Steam and condensate

Steam distribution other than thatfor space heatingCondensate return other than thatfor space heating

Valves and insulation inconnection with these items.

5.5 Heat source

The boiler ratingshould be stated inkilowatts

If the gas service is providedprimarily for heating it should beincluded here. In the breakdownthe cost of each form of heatsource should be given separately.

Designedheatloadingforsystemkw

BoilersControlsFansCalorifiersIndependent chimney stacks andliningsFuel conveyorsHeader tanks and the cold watersupply in connectionFuel tanksPumpsValves

Insulation to boilers etc


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unitquantity


5.6 Space

heating and air

treatment

Area of

compartmentstreated in m²


=_____________

The type of system (inlet, extractetc) used for air treatment shouldbe stated. Where there is acombination of treatments egheating, cooling, dehumidifying

etc this shall be stated.

The element should be brokendown or allocated to one or moreof the nine sub-elements incolumn four.

Cube oftreatedspacecalculatedas

follows:Grossinternalfloor areaof sectionofbuildingtreatedmultipliedby itsstoreyheight(floorfinish tofloor

finish or,in thecase ofsingle-storeybuildingsand topfloors ofmulti-storeybuildings,floorfinish toceilingfinish) m³

5.6.1 Water and/or steam

heating RadiatorsPipe coilsControls

ValvesDistribution pipework to above

5.6.2 Ducted warm air heating DuctsGrillesFansControls

5.6.3 Electric heating Storage unitsOff peak systemsCable heating systems

5.6.4 Local heating

FireplacesUnit heaters (electric, gas etc)Radiant heatersGas fires etc

5.6.5 Other heating systems

5.6.6 Heating with ventilation

(air treated locally) DuctsGrillesHeat emission unitsControlsDistribution pipework

5.6.7 Heating with ventilation(air treated centrally)

5.6.8 Heating with cooling (air

treated locally)

5.6.9 Heating with cooling

5.7 Ventilating

system

Details of themethod and extentof the systemsshould be stated

Area ofcompartmentstreated in m²

Gross floor area in

m² =_____________

Includes mechanical ventilationinstallations not incorporatingheating or cooling systems

Cube oftreatedspacecalculatedasdescribedin

element5.6 m³

Non-structural ductsIsolated fansDust and fume extractionCanopiesRotating ventilatorsControls


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unitquantity


5.8 Electrical

installation

The number oflighting points, the

number of poweroutlets and thetotal electrical loadin Kw should bestated separately.The cost of anyspecial itemsshould be statedand theillumination levelstabulatedaccording to theprincipal functions

Built in electrical heating systemsare NOT included in this elementbut should be allowed for in‘Space heating and air treatment’element.

In the breakdown the cost ofstandby equipment should begiven separately.

This element should be brokendown into four sub-elements

5.8.1 Electric source and mains5.8.2 Electric power supplies5.8.3 Electric lighting5.8.4 Electric light fittings

5.8.1 Electric source and mains

Distribution boardsMain switchgearMain and sub-main cables

Control gear etcEarthing

5.8.2 Electric power supplies

The cost of supplies to differenttypes of installation should begiven separatelyCables, wiring and conduits fromlocal distribution boardsSwitchesOutlet points

5.8.3 Electric lighting

Cables, wiring and conduits fromlocal distribution boardsSwitchesOutlet points

5.8.4 Electric lighting fittings

Fittings including fixingThe cost of different types andqualities should be givenseparately

5.9 Gas

installation

The number ofoutlets should bestated

When the gas service is primarilyfor heating or hot water it shouldbe included with those elements

Numberofoutlets

Installation from and includingmeter.Distribution pipework to

appliances

5.10 Lift and

conveyor

installations

The number ofrush periodpassengers forwhich the liftshave beendesigned should bestated.

The number,capacity, speed,number of stops,number of doorsand height servedby lifts should begiven.

The capacity of joists should begiven inkilogrammes.The rise and travelof escalators

should be stated.

In the breakdown the cost of eachtype of installation should be givenseparately.

The costs of plant rooms and otherstructural elements connected withlifts and conveyor installationsshould NOT be included in thiselement but allocated to theappropriate structural element.This element should be brokendown into three sub-elements

5.10.1 Lifts and hoists5.10.2 Escalators5.10.3 Conveyors

5.10.1 Lifts and hoists

Lift cagesGantriesTrolleysHooks, ropes etcElectrical work from and includingisolator

5.10.2 Escalators

5.10.3 Conveyors


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unitquantity


5.11 Protective

installations

Number ofsprinker outlets,the controlmechanism and thearea served byeach mechanismshould be stated.

Area ofcompartments

treated in m²Gross floor area inm²

=_____________

Electrical work to sprinklers isNOT included in this element andshould be allowed for in ‘Electricpower supplies’ sub-element. Inthe breakdown the lightning

protection to boilers and ventstacks should be given separately.

This element should be brokendown into three sub-elements

5.11.1 Sprinkler installation5.11.2 Fire fighting installation5.11.3 Lightning protection

5.11.1 Sprinkler installation

Sprinkler installationCO extinguisher systemsControl mechanism

5.11.2 Fire fighting installation

Hose reelsAsbestos blanketsDry risersFoam inletsFire extinguishersBuckets

5.11.3 Lightning protection

FinialsConductor tapesEarthing

5.12

Communications

installations

Burglar alarmsFire alarmsClocksTelephonesPneumatic tubesTelevision and radio

5.13 Special

installations

This element includes mechanicaland electrical installations whichdo not fit into other elements.

Installations for chemical gasesWindow cleaning cradles etcGarage equipmentRefrigerated stores

5.14 Builder’s

work in

connection with

services

In the breakdown the total cost andthe cost per m² of gross floor areafor service element 5.1 to 5.13

inclusive should be givenseparately

BasesHolesBolts

Bearers

5.15 Builder’s

profit and

attendance on

services

In the breakdown the total cost andthe cost per m² of gross floor areafor each service element 5.1 to5.13 inclusive should be givenseparately.

2


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unitquantity


6.1 Site works This element should be brokendown into four elements

6.1.1 Site preparation6.1.2 Surface treatment

6.1.3 Site enclosure and division6.1.4 Fittings and furniture

Theoverallelementcostshould

be givenas a costper m²of grossfloorarea.

The unitquantityfor sub-element6.1.1 ism². Forsub-element

6.1.2 ism². Forsub-element6.1.3 ism. Forsub-element6.1.4 isnumber

6.1.1 Site preparation

Clearance and demolitionEarthworks

6.1.2 Surface treatment

RoadsPathsCar parksPlaying fieldsPlaygroundsRetaining wallsLand drainageLandscaping

6.1.3 Site enclosure and division

GatesFencing

WallsHedges

6.1.4 Fittings and furniture

NoticeboardsFlag polesSeats

6.2 Drainage Land drainage is NOT included inthis element but should be allowedfor in sub-element ‘Surfacetreatment’ (6.1.2)

GulliesManholesDrainpipes to soil and surfacewater drainageSewage treatment plants

6.3 External

services

This element includes the servicemains external to the building.

This element should be brokendown into nine sub-elements as setout in column four

6.3.1 Water mains

6.3.2 Fire mains

6.3.3 Heating mains

6.3.4 Gas mains

6.3.5 Electric mains

6.3.6 Site lighting

6.3.7 Other mains and services

6.3.8 Builder’s work in

connection with external services

6.3.9 Builder’s profit and

attendance on external

mechanical and electrical

services


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unitquantity


6.4 Minor

building work

This element should be brokendown into two sub-elements

6.4.1 Ancillary buildings6.4.2 Alterations to existing

buildings

The unitquantityfor sub-element6.4.1 is

the grossfloorarea oftheancillarybuildingsm²

6.4.1 Ancillary buildings

Isolated buildingsSub-stationsBicycle stores

6.4.2 Alterations to existing

buildings

AlterationsMinor additionsShoringRepairs

Preliminaries

. . . . . . . . % ofremainder ofcontract sum (lesscontingencies)

In the breakdown the individualcosts of the main preliminaryitems should be given

Professional fees should not beincluded here

Lump sum adjustments should bespread throughout all elementsbased on the total of each elementless PC and provisional sumsWhere the analysis is for oneblock of a larger contract thePreliminaries should be allocatedin proportion to the cost of theblock

Contract and preliminary clauseitemsInsurancesWater for works etc.


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4 Comparison of analyses

Analyses vary considerably for similar types and sizes of buildings, and a carefulstudy is necessary before one is used for cost planning purposes. Table 2 showsfigures for two different analyses which could apply to office blocks built at the sametime in the same locality, with comments on why the two sets of figures vary. Figure4 shows an example of amplified analysis.

TABLE 1 Information to be included in an amplified analysis

Type of buildingOffice block

Gross internal floor area1 200 m²

Date of tender May 1986

Elementnumber

Element Cost of element per m² of

gross floor area in £ COMMENTS

Building A Building B

1.0 Substructure 37.28 56.85 Building A is on reasonably goodsoil and has reinforced concretecolumn bases and ground beams.

2.1 Frame 48.46 78.29 Building A has a reinforcedconcrete frame and is partlysingle and partly three-storey.Building B is steel framed,concrete cased and is mainlyfour-storey.

2.2 Upper floors 34.48 41.00 Just under half of building Afloor area is on the ground floorwhile only about 30% ofBuilding B floor area is on the

ground floor.2.3 Roof 46.60 27.96 Building A has greater roof area

due to the greater percentage ofground floor space. The roofconstruction for Building A has acovering of felt and Building B iscovered with Asphalt.

2.4 Stairs 8.39 15.84 Wider staircases, more elaboratebalustrades and two extra storeyflights of stairs for Building B(one flight each end betweenthird and fourth storey).

2.5 External walls 42.87 66.17 Building A is constructed withcavity walls of brick and blocksand medium priced facings.

Building B is of a more irregularshape; the increased height alsoincreases the area of externalwalling. The walls haveexpensive bricks and stone ashlarwork. This element also includessome aluminium curtain walling.

218.08 286.11


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Elementnumber

Element Element cost

Building A Building BCOMMENTS

b/fwd

218.08b/fwd

286.11

2.6 Windows andexternal doors

25.16 52.66 The windows in Building A aremainly standard galvanised steel.

Building B has aluminiumwindows some of which aredouble glazed.

Building A has cheap doors andframes while Building B hashardwood frames and screenswith some hardwood and sometoughened glass doors.

2.7 Internal walls 14.91 38.68 In both cases most of the internaldivisions are non-load-bearing.

Only the main divisions areprovided in Building A and theclients provide their ownpartitions within the main officeareas.

Building B is for owneroccupation and all the partitionsare provided, some of which arepatent moveable type.

2.8 Internal doors 7.46 20.97 Only a few cheap doors inBuilding A as most of thepartitions provided by the tenant.

3.1 Wall finishes 5.59 31.22 The walls in Building A aremostly plastered.

Building B has some plaster butpanelling is provided in theexecutive suite and marble andmosaic in the entrance hall and onthe walls of the main staircase.The toilets are partly tiled. Somewallpaper allowed for.

3.2 Floor finishes 22.37 32.62 Mainly thermoplastic tiles inBuilding A.

Building B includes a variety ofdifferent finishes includingwoodblock, mosaic, quarry tilesand some vinyl tiles. The elementalso includes extra thicknessscreed and insulating material forunder-floor heating.

293.57 462.32


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Elementnumber



b/fwd

293.57 b/fwd

462.26

3.3 Ceiling finishes 19.57 39.14 Building A has mainly plasterdirect on to the concrete structure.

Building B has patent suspendedceilings mostly finished withacoustic tiles.

4.1 Fittings andfurnishings

9.32 49.86 Only essential fittings areprovided in Building A but inBuilding B, which will beowner occupied, most of the mainfittings are included in thecontract together with somefurnishings.

5.1 Sanitaryappliances

2.80 3.73 Building B has more and betterfittings as it is for the owner-occupier.

5.2 Servicesequipment

Nil Nil

5.3 Disposalinstallations

4.66 5.13

5.4 Waterinstallations

9.32 10.25

5.5 Heat source 10.25 Nil Building A has solid fuel hotwater heating and Building B hasunderfloor electric heating.

(Note: the additional cost ofscreed and insulation is includedin floor finishes)

5.6 Space heatingand air treatment

28.89 17.24

5.7 Ventilatingsystem

Nil Nil

5.8 Electricinstallation

27.03 50.33 Essential fittings only areprovided in Building A whereasBuilding B has many elaboratedecorative fittings.

5.9 Gas installation Nil 0.93

405.41 638.87


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Elementnumber



b/fwd

405.41b/fwd

638.87

5.10 Lift andconveyorinstallations

27.03 31.69 There is one extra storey inBuilding B and the lifts providedare faster and better equipped.

5.11 Protectiveinstallations

1.40 1.40

5.12 Communicationinstallation

Nil 1.40 Special telephones are includedfor Building B.

5.13 Specialinstallations

Nil Nil

5.14 Builder’s workin connectionwith services

7.92 13.98

5.15 Builder’s profitand attendanceon services

1.40 6.99 The contractor for Building A hasfound that the PC sum used byhis architect in the bills ofquantities are generally high. Hehas therefore priced the profit andattendance low and increased hisrates on other work to allow forthis. The opposite is the case forBuilding B.

Note: sub-total excludingexternal workspreliminaries andcontingencies.

443.16 694.33

6.1 Site works 18.64 46.60 Only the essential works wereincluded in Building A whilelandscaping was provided for theother building.

6.2 Drainage 6.52 10.25 Increased sanitary fittings moredispersed in B and a site whichresults in deeper drains.

6.3 Externalservices

1.40 2.33 Building B is situated furtherfrom the road than A.

6.4 Minor buildingworks

Nil 5.13 Building B has a bicycle shed,substation and some garages.

Preliminaries 46.60 59.65

Total (less contigencies) 516.32 818.29

Contingencies 13.98 20.04

530.30 838.33

You can see from the above example that indiscriminate use of figures taken from a costanalysis can result in an incorrect cost plan being prepared.


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FIGURE 4 Example of amplified analysis

A B C D = A

C

Specification

Element and design criteria Totalcost ofelement

Cost ofelement

per m² of gross

floorarea

£

Element unit

quantity

Elementunit rate

£

2.7 Internal walls and partitions

Internal wall and partition area in m²

Gross floor area in m²

7 259 12.65 218 m² 33.30 Half brick wall75 mm expanded clay aggregate concreteblockwork100 mm Ditto50 × 50 mm and 75 × 75 mm stud partitionsTimber WC partitions

Preliminaries 7.52% of remainder ofcontract sum

=218 m²

574 m² = 0.380

Partitions £ Areain m²

‘All in’ unitrate £

Half brick wall 938 26 36.08

75 mm blockwork 2 226 73 30.49

100 mm blockwork 3 290 94 35.00

Stud partitions 210 5 42.00

WC partitions 595 20 29.75

2.8 Internal doors Preliminaries 7.52% of remainder ofcontract sum

4 473 7.79 28 m² 159.75 35 mm flushed doors hardwood lipped andplywood faced45 mm Ditto45 mm glased

Internal doors £ Areain m²


No 4 – 35 mm doors 819 6 136.50

No 10 – 45 mm doors 2 289 15 152.60

No 4 – 45 mmglazed doors

1 365 7 195.00

3.1 Wall finishes Preliminaries 7.52% of remainder ofcontract sum

6 496 11.32 666 m² 9.75 Two coats lightweight plasterPlaster lath and two coats lightweight plaster150 × 150 × 6 mm white glazed wall tiling

Wall finishes £ Areain m²


Lightweight plaster 5 502 617 8.92

Plaster lath and plaster 350 30 11.67

Wall tiling 644 19 33.89


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5 Other sources of cost data

* Prices vary considerably between publication and you should use the figures only after careful studyand comparison with prices in bills of quantities for work in your area.

TABLE 3

Source Application

1 Cost limits and cost

yardsticks

Preliminary budgets and cost limit estimates.

2 Cost information published inPrice Books, approximateestimating section.

Preliminary budgets, cost limit estimates, earlypreliminary estimates. Outline cost plan.

3 Cost information published inthe measured work section ofPrice Books.*

Cost plans, cost checks, final cost checks

4 Details of measured ratespublished in professional andtrade journals.*

Cost plans, cost checks, final cost checks.

5 Cost analyses published intrade journals. Preliminary budgets, cost limit estimates, earlypreliminary estimates and outline cost plans (in manycases there is insufficient information to use for costplans).

6 Cost analyses published bythe RICS in the Building CostInformation Service (BCIS)

All preliminary estimates and elemental cost plans andparts of comparative cost plans.

7 Cost analyses prepared in thequantity surveyor’s own office.

All preliminary estimates and elemental cost plans andparts of comparative cost plans.

This source is generally more reliable than the sources in(5) and (6) as the surveyor can use his own knowledge of

site conditions, economic climate etc of the analysedprojects.

8 Priced bills of quantities ofprevious projects.

Cost plans, cost checks, final cost checks. The totalfigures may be used for calculating preliminary estimatesbut some adjustment for differences in size or standard ofbuilding is usually necessary. Composite rates may bebuilt up from the bill rates which may also be used forpreliminary estimates.

9 Rates worked out during thesettlement of final accounts andrates calculated from aknowledge of builders’ material

costs and labour rates.

These can be used in a similar way to the priced bill ofquantities for building up composite rates and forpreparing cost plans and carrying out cost checks. Arecord of agreed costs for unusual items may be of use

for future projects.


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5.1 Reliability of cost information

Students are often disconcerted to realise that the sources of information for costplanning are all subject to variation. In the case of published data, for example:

Publishers of measured rates may be using average prices and the method usedto obtain the average may be statistically suspect.

Published rates may be recalculated at infrequent intervals and there may be noindication of the last revision date. (This also applies to some tradeperiodicals.)

The items included in the elements may not be the same in each case, due to:

differences in the requirements of the publishers;

inefficiency or lack of knowledge on the part of the person analysing;

genuine mistakes, including printing errors.

Variations in cost data do not invalidate its use, but the user must be capable ofinterpreting cost information in its context and adjusting it correctly in order to re-useit. A few well chosen examples of data about which the surveyor has personalknowledge of the circumstances surrounding the pricing of the jobs is often betterthan indiscriminate use of averages based on sources whose backgrounds are littleknown.

A great deal of handling and systematic recording of cost data is required to enablethe quantity surveyor to know what are reliable figures. In order to derive reliablecost information from as many sources as possible, standardisation of the elementsinto which building costs are analysed is desirable. The RICS Building CostInformation Service (BCIS) list of elements is now the most widely accepted.

Interpretation of cost data is partly a matter of opinion and not completelymathematically accurate. The analytical approach to the detail does provide anexplanation for some variations and reduces to a minimum the chance and size ofdifferences that may appear to exist in the initial investigation of the cost data.

It has been suggested that bills of quantities should be divided in a different way fromthe traditional trade sections. Some bills have been prepared in elemental form, othersin operational or locational form, but in practice the disadvantages of the increasednumber of items and the difficulties involved in pricing have outweighed theadvantages claimed. With the use of computers it is possible to procure severallayouts for bills with very little extra effort, so that the ordinary trade bill can beproduced for tendering purposes. The computer can then be supplied with details of

pricing and a priced elemental bill can be produced for analysis purposes.

5.2 Information library

Many quantity surveyors’ offices have access to a library of cost information thatincludes:

Normal trade literature and price lists, referenced using some systematicscheme with an adequate index and cross-referencing system.

Analyses of all office tenders with priced bills of quantities and classified inaccordance with the CI/SfB code for building types.


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Because of the complexity of the building industry and the amount of literaturebeing produced, most architects and surveyors use the CI/SfB system whichprovides for a large number of sections. Table O: Built environment givessuitable classifications for buildings:

1. Civil Engineering Works

2. Transport, Industrial Buildings

3. Administrative, Commercial Buildings

4. Health and Welfare Buildings

5. Refreshment, Entertainment, Recreational Buildings

6. Religious Buildings

7. Educational, Cultural, Scientific Buildings

8. Residential Buildings

Only the main headings are given above. For further details you could refer tothe Construction Indexing Manual published by the RIBA.

Analyses published in professional and trade periodicals classified asabove.

Cost indices from various published sources.

Special information on cost trends published in periodicals, together withdetails of any facts likely to affect future costs.

Special details on planning and social factors published in periodicals (eg Architects’ Journal) which are likely to affect the cost of buildings. Thesecan generally be classified under the CI/SfB headings.

Any special cost information collected for a particular project whichrequired original research in order to obtain the data.

Data contained in the literature sent out to subscribers to the Building CostInformation Service of the RICS. Before submitting cost details, quantitysurveyors should get permission from the contractor, the building ownerand the architect. The information provided includes:

Cost indices and cost trend details.

Cost analyses in two forms:

i. a concise cost analysis with brief details;

ii. an amplified analysis giving sufficient details to make preciseadjustments to individual elements for differences. Anexample of a page of an amplified analysis is given earlier inthis paper.

Publications digest.

Cost studies. These are articles on particular building problemsundertaken by the service or submitted by members or local studygroups.

Current prices and wages.


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6 Indices

Cost data is historical data. When we use this data to prepare an estimate or cost plan,we need a means of updating it. Indices are a way of comparing changes in buildingcosts and tender prices over time.

A building cost index charts movements in the underlying costs of building by

tracking changes in the price of key inputs to the process, such as material costs,labour costs and plant hire rates. Generally a standard mix of resources is used toreflect the balance of costs of a typical project of a given type.

Building cost indices are compiled by official bodies using a model that takes data onmaterial prices supplied by the Department of Employment. Specialist organisations,such as the National Association of Lift Manufacturers, also publish cost indices forthe more specialised aspects of construction for which a general building cost indexwould be inappropriate. If the weighting of the model is incorrect, the index will bedistorted.

A contractor is more likely to use this index when trying to predict future costs. Bylooking at past trends, the possible future movement in costs can be assessed. Thestructure of an input index model is shown in Figure 5.

A tender price index charts the movement of tender prices. It includes market factorsas well as the resource costs used in the building cost index. Tender price indices maytherefore be used to compare the costs of buildings for which tenders were obtained atdifferent dates, or to adjust analyses of past tenders to current prices. Future trends inprice levels may be forecast by a study of the indices, taking into account any currentwage price negotiations, any foreseeable changes in unemployment in theconstruction or other industry, and other political and economic factors likely to reacton the building industry. It is therefore used in the cost planning process.

The BCIS provides a series of indices to subscribers giving details of changes invarious types of tenders. Indices are provided for four different classes of buildings(eg load-bearing brick, steel-framed). Other indices assess the effect of changes inmarket conditions (based on local authority housing) and the adjustment on tendersfor fluctuation risks.

FIGURE 5 Input index model


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A separate set of indices assesses changes in tender prices for different sections orelements (services, external works etc) of the structure.

The BCIS also provides information on particular circumstances and local trends inregions throughout the country.

Indices may be given in the form of a table. A particular year is given as a cost base

of 100. Any increase or decrease in cost is calculated as a percentage of the base yearand the percentage figure is added to or deducted from 100 (Figure 6).

The same figures may be plotted on a graph, the years generally being plottedhorizontally and the index figures vertically (Figure 7).

Indices may be used to bring a tender figure for a previous job up to current prices sothat it can be used for comparison or for cost planning purposes – see Example 1.

FIGURE 6 Index in table form

Base year 1999 2000 2001 2002

First quarterSecond quarterThird quarterFourth quarter

323325334346

345353362375

375383388392

398405423421

FIGURE 7 Index in graph form


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EXAMPLE 1A firm price contract had a tender figure of £1,700,000. The general index for the date oftender was 320. The estimate for which the figures are required is for a fixed pricecontract. Market conditions in the two cases are assessed to be similar.

Calculate the revised current figure for original contract work.

The new contract will not have a fluctuations clause, so the general index, 335, mayneed to be increased to cover the contract period – say 340.

Updated price for original work = £1,806,250.

If general or local market conditions had been different, further adjustment would benecessary.

Remember that tender price indices only give an indication of the average trend of

building tenders. The skill of the quantity surveyor must be used to adjust indices to allowfor any special factors that affect the cost of the analysis or the cost plan project.

SELF ASSESSMENT QUESTION 2What is the most reliable source of cost information, and why?

Adjustment to tender price £170,000 ×340

= £1,806,250320


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1 Introduction

Preliminary estimates are prepared before the bill of quantities is available. Where nobill is being prepared, they are the estimates arrived at before the contract or tenderfigure is obtained.

Preliminary estimates are an attempt to forecast a reasonable cost for a project. They

are prepared so that the client is aware of his commitments as near the inception ofthe project as possible. They also enable the architect to decide whether his design isa reasonable one having regard to the amount of money available.

Remember that the degree of accuracy of the estimate will reflect the extent of theinformation available. Nevertheless, estimates should be calculated as accurately asthe information available and the skill of the surveyor will allow. Do not over-inflateestimates, as the client’s decision whether to carry on with or abandon the projectmay depend on the estimated figure. A low first estimate (perhaps due to lack ofinformation) is also undesirable, as it is likely that the figure the client remembersbest will be the one he hears first.

When preparing the estimate, the following should be included:

All the items normally forming part of the tender figure.

Brief details of the specification on which the estimate is based.

Mention of any special items that are excluded (shop fitting, special joineryfittings, demolition etc). Failure to inform an architect or client of itemsexcluded may at best cause problems later, and at worst give rise to allegationsof professional negligence.

The date of the estimate.

The drawings from which the estimate is prepared.

The assumed tender date, so that confusion will not arise if several revisionsare made.

The amount allowed for price fluctuations between the estimate and tenderdate should be clearly indicated.

Surveyors should not be influenced by what the architect or the client thinks the jobshould cost. The quantity surveyor is the building cost expert, and he should base hisfigures on the information he is given about the project and on his experience of past

jobs. The estimate given to a client or architect should only be amended with goodreason and not just to please the architect. If the original estimate figure was right,within reasonable limits, then any alteration is likely to cause friction later.


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2 Methods of estimating

The main methods used for estimating are:

2.1 Unit method

The quantity surveyor may use the unit method of estimating at the early brief stageof a project, when the client may have only an idea of the number of items or peoplehe wishes to accommodate in the proposed building and wishes to know the likelycost before proceeding further. At this stage it is assumed that no drawings have beenprepared and there is only a general idea of the quality required.

Examples might be:

A project such as a new multi-storey car park. If the quantity surveyor knowsfrom published data or (preferably) from previous experience that the cost ofproviding space for one car varies from £3000 to £3500, he can work out anapproximate figure by multiplying, say, £3250 by the number of cars. At thisearly stage it may be better to give a range of costs – from £3150 to £3450 –with an idea of the quality likely to be obtained at different points within therange.

Hostels – cost per bed.

Schools – cost per student place.

Theatres – cost per seat.

Because of the wide range of costs per unit and the small number of units to bemultiplied, this method of estimating requires a lot of skill to obtain an accuratefigure. It is easy to calculate once the unit cost has been decided, but it is not a veryreliable method for accurate estimating and should only be used in the early stages ofa project or where budgets are being prepared by an organisation to calculate futureexpenditure.

2.2 Superficial method

This is the most popular method of estimating during the early stages of a projectonce the general outline drawings have been prepared.

Because the floor area is less than the volume of a building, any small error inarriving at a price rate will have less effect on the total estimate. However, the storeyheights will have an effect on the cost, so height must be taken into account whendeciding the price rate. As far as possible the price rate used should be based on datataken from similar building projects with similar storey heights.

The superficial area of the building should be measured between the inside faces ofexternal walls with no deductions for partitions, stairwells, lifts etc. Where a buildingconsists of parts which are of a different construction, or where the standard of finish

is widely different, each part should be measured separately so that different pricerates can be used.

1 Unit

} Single rate methods2 Superficial

3 Elemental (this is really only an extension of the superficial method)

4 Approximate quantities.


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External works and abnormal items (eg piling) are normally allowed for separately aslump sums which are added to the normal superficial price calculation.

External works are generally priced by measuring approximate quantities, asexplained in a later section.

Specialist lump sums may be arrived at from quotations or estimates obtained from

specialists as in the case of piling, or they may be based on information obtained fromprevious projects.

The superficial method is sufficiently accurate at this stage, as most of the items arerelated more to floor area than to volume. The floor area is easy for most clients tounderstand, and in many cases the architect’s brief will tell him that certainequipment is to be installed which will require a given floor space. The use of thismethod is therefore a help to both the client and the architect during the designperiod.

The area for this method is relatively easy to calculate, but it does require skill inassessing a price rate. Particular care is necessary when comparing similar types of

building with widely differing storey heights.

This method has two main disadvantages: it does not directly take account ofchanges either in

Documents

Cost Planning and Pre-contract Cost Control